Lahore – The country’s total fertilizer off-take during March 2016 fell by 49 percent to 279,000 tons. Urea which is the most used fertilizer in Pakistan witnessed massive 73 percent drop, due to weak farmer demand.

On the other side, DAP sales grew by 80 percent, thanks to subsidy of Rs500/bag. Latest data shows that despite lower retail prices and discounts on top of that, EFERT, FFC and FATIMA off-take dropped by 88 percent, 72 percent and 89 percent, respectively.

Experts blame, weak farmer purchasing power for the decline in demand. Further, imported Urea off-take dipped by 95 percent due to excess local supply and farmers’ preference for local branded Urea.

As per channel checks, demand remained subdued in April 2016 due to i) deteriorating farmers’ buying power owing to losses suffered on crops, ii) excess supply on the back of better gas availability to Agritech, Pak Arab and DH Fertilizer plants, and iii) expectation of price decrease .

Going forward, it is expected demand to pick up pace in May 2016 as sowing of Kharif crops starts in coming months.Further, Govt. would extend currently exhausting subsidy on DAP and may also reduce gas prices for fertilizer sector to provide relief to the agriculture sector, which is the backbone of the country’s GDP. However, the company has not declared any dividend, likely due to liquidity issues and upcoming foreign investment.